BULGARIA IS AN ALLURING PLACE FOR INVESTMENTS, ESPECIALLY WHEN IT COMES TO THE IT SECTOR.
Relatively low price rates for software development services accompanied with skilled, multilingual, talented employees make Bulgaria an appealing destination for Western investors and entrepreneurs. Considering this fast yet stable advancement for Outsourcing to Bulgaria, the country can be seen as one of the best outsourcing destinations in a worldwide perspective.
The IT sector is developing into one of the most successful economic segments in Bulgaria. Highly qualified staff and a strong tradition characterize the area.
In the last 7 years the IT sector in Bulgaria grew by 300%.
Why to invest in the Bulgarian IT & BPO sector?
The general advancement of financial exercises in Bulgaria and the aptitudes of national IT experts have changed the nation into a destination of profound interest to a rising number of local and foreign organizations.
International ICT companies find Bulgaria attractive because of the 0 percent export tax, low operating costs and skilled local workforce. Some of the attractive sides of the Bulgaria are the geographic proximity to large European countries, the availability of highly educated workforce, the low labour costs.
Bulgaria is home to approximately 10,000 ICT, including HP, IBM, SAP, VMWare, Adecco. Because of the excellent University programs, the country has a well-educated workforce, including skilled IT specialists and multi-lingual talents. With 64,000 graduates from 53 universities and colleges and about 50% of the graduates obtaining degrees in majors suitable for the needs of the BPO industry.
Good educated workforce
There are 220 high schools, which offer ICT courses as their first profile and combine it with solid English and other preparatory language classes. Bulgaria has one of the highest proportions of students abroad from all European countries and 17% of those returning to the country have majored in Technical studies.
High speed internet
The country’s internet infrastructure is among the best in the European Union and in the top ten in the world. Bulgaria performs slightly better than the EU average when it comes to coverage of high-speed broadband in urban areas. According to the third Annual broadband study by Cisco, Sofia ranks 11th in quality of the Internet connection and 6th out of European cities.
Low labour costs
Low labor costs are another huge factor in drawing outside investments. Bulgaria had the lowest hourly labour costs in the European Union in 2020, according to figures published by EU statistics agency Eurostat. Because of the low costs, many companies outsource their business operations in Bulgaria. Most companies having outsourcing operations in Bulgaria come from Western Europe and the United States. The biggest Bulgarian cities (Sofia, Plovdiv, Varna, and Burgas) are the largest hubs for outsourcing services.
The IT employees from Bulgaria have at least the same skills as other IT specialists, but the salaries here are comparatively low. This results in a great cost advantage for Central European companies. At the same time, a nearshore center in Sofia can compensate for the shortage of skilled workers in Germany, Austria or Switzerland.
Moreover, the rental prices including ancillary costs (energy, water, municipal expenses) for office space are also low compared to the other countries of the European Union
Membership in leading organisations
After ten years of EU membership software business in Bulgaria is the best performing sector in the ICT industry. One of the factors that attracts so many companies to do business in Bulgaria are the low corporate tax rates of 10 percent. Bulgaria is also among EU member states where the share of ICT in the formation of the gross added value is relatively high, ranking the country 5th in the EU.
Low taxation and political stability
The Bulgarian government aims at improving economics in the country, thus promotes tax incentives for both local executives and foreign investors. The personal income tax rate in Bulgaria is one of the lowest compared to other European countries (10%), the corporate tax is also 10%.
Bulgaria also offers a combination of political and macroeconomic stability and incentives for doing business with its stable parliamentary democracy, EU, NATO and WTO membership. Bulgaria’s currency is fixed to the Euro under a currency board arrangement.
Bulgarian Citizenship by Investment
The Bulgarian citizenship offers many benefits, like the visa-free travel to more than 156 countries. Bulgaria provides advantageous conditions for foreign investors and local companies and you can even avail yourself of the Bulgarian Citizenship by Investment. The procedure now is shortened from 18 to 12 months. You have to participate in Bulgarian Trading Company for 256 000 EUR and employ at least 10 Bulgarian nationals. By increasing your participation and investing in the capital from 256 000 to 512 000 EUR and increasing the Bulgarian employees to 20 you will be able to receive permanent residence.
Five European corridors cross the country. There are four major airports: in Sofia, Plovdiv, Varna and in Burgas. There are two main seaports: In Varna and Burgas.
Considering all of this, we can conclude that countries that successfully adopt IT trends, such as Bulgaria, become more attractive and favorable to investments, competitiveness, economic growth and productivity. Bulgaria is an example that shows how the software industry can affect in a positive way the business landscape and even the education system.
The IT sector in Bulgaria offers to the investors a number of advantages, the most important of which are undoubtedly the well-educated specialists and the low labour costs, compared to other European countries. The country’s policy to support the business also aims to encourage foreign investments and guarantees a number of incentives for those, willing to expand their business in Bulgaria.